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Estimating Sales, Part IV: Using Public Databases

Thursday, September 24th, 2009

It’s important to do more than one estimate of your titles’ sales. Why? Because each set of data you use will give you a different number, and all of them will be wrong in different ways. If you average them, you get a better chance of a good prediction. Of course, if you could pick the best estimate from the bunch, you’d be closer, but which one is it? I don’t know, and you probably don’t either.

The previous 3 parts of this series dealt with the use of experience, marketing plans, and Amazon data on comparable titles to predict the sales of either that comp or of your book. Part V will discuss using sales of comps to predict sales of your title, and then combining all of the various predictions into an overall prediction of sales for your title.

This part of the series covers projecting the sales of comparable titles from other sources of data, and combining all the various projections of comparables’ sales. The best sources of data besides Amazon are Bookscan, Ingram, and perhaps the data your friends inside other publishing companies are willing to share. (That last is an old industry tradition that is fading slowly as the industry expands and changes.)

So, you have a list of carefully chosen comparable titles. They’re all from companies that are distributed in similar ways, and they all have similar marketing muscle behind them. They’re all aimed at the same audience, and are intended to fill similar needs.

Now what? Well, Ingram has the iPage facility. Use it to get a good idea of what Ingram’s volume has been for each of those comparables over the past few months or a year. Bookscan also offers good data on sales.

Ingram is, of course, the primary wholesaler to the book trade. You should know roughly what fraction of this type of book’s sales will go through them. For many trade books, it will be something like 50%, but for others, it will be much more or much less.

Bookscan records approximately 70% of the sales by general bookstores. Obviously, the publisher will be selling more to the bookstore than the store has moved out of the doors, but this is still a solid number. It may not be very helpful to you, though, if you’re doing books that don’t move through bookstores and similar retailers.

If you have those numbers for a “bookstore book,” or even for one that will sell a significant share of the total through stores, you can make a pretty good estimate of the total sales for that comparable title.

To go from the fraction that went through a channel, say Ingram, to the total sold, is simple. Divide the sales by the fraction. For example, let’s say that half of your books generally go through Ingram. And that you know your comparable title sold 1,000 copies through Ingram. Divide that 1,000 by 1/2, and you get 2,000. That’s your estimate of how many copies that comparable title sold — based upon the Ingram data.

For Bookscan, it’s only slightly more complex. You divide Bookscan’s report by .7 to arrive at the estimated bookstore sales, and then divide that result by the fraction that you expect to distribute through bookstores. That result is the Bookscan-based estimate of your comparable title’s total sales.

If you have an estimate of the sales through Amazon (from Part III), you can gross that up to an estimate of total sales for that title, by again dividing by the fraction of total sales that you expect to make through Amazon. (For trade books from a mid-sized publisher, that might be .15, for example. For niche non-fiction from a micro-publisher, that number might be as high as 75 or 80%.)

To make ANY estimate better, you can combine a number of different versions that are based upon different data sources. If you average them, you should help remove any random error. Here, you’d take all three estimates of total sales for each comp (based on Ingram, Bookscan and Amazon numbers), add them together, and divide by 3. [Yes, I know you know how to average. Just being complete.]

CAVEAT: This doesn’t always work. If Murphy is out to get you, all the errors will be in the same direction, perhaps because of some underlying and confounding variable that’s not properly understood.

My response to this issue: if my judgment says that the results don’t make sense, I either dig further to find the problem, or ignore the estimates. Do NOT, NOT EVER, ignore that little voice in your head that says something’s wrong.

Any questions out there? Come on, ‘fess up. I’m pretty sure my writing isn’t so incredibly lucid that everyone is still with me.

For that matter, does anyone have a better way?

Posted in Publishing Answers | 2 Comments »

E-book Pricing

Sunday, August 9th, 2009

We all know the basic theory for finding the right price: figure out how many your readers will buy at each price, and how much it will cost you to produce each copy at each volume, and then look for the price/volume combination that yields the greatest total margin.

We all also know that this is easier said than done for print books, even with the advent of databases like Nielsen Bookscan, but it’s practically impossible for ebooks. So far. Bookscan doesn’t measure sales for ebooks. You can’t call Ingram and get sales numbers for them, either.

And no one knows what the Amazon ranks for ebooks mean — not to mention, that those volumes for a given rank would change wildly in the future, as ebooks become more popular. So, we can’t really predict the volume for a given price.

What can we do? We can say that for certain types of books, certain price expectations are becoming common. For example, Amazon has made $9.99 the norm for a trade book currently in hardback. And the ebooks of titles currently available in mass market paperbacks tends to range between $3.99 and $6.39, with the upper end representing current and high-volume books, and the lower end representing backlist.

And yes, Virginia, there is a backlist for mmp in ebooks. Who knew that this was possible?? Of course, it wasn’t for print books, because of the economics of producing, storing, shipping and selling the physical object, but ebooks make it work.

In short, we’re going to have to fall back upon the old standard: find your books’ competitive titles, and price your book to meet that competition.

Will that offer you enough revenue to cover your costs? Or even, wonder of wonders, make a profit?? That is, indeed, the question. And what costs should you consider?

1. Royalties. Authors deserve to get an amount similar to the amount they get for the sale of a print copy, in my opinion. Not a similar rate, but a similar total. That may well mean that the rate is double or triple the royalty rate for print, given the smaller list prices. And publishers should consider setting the breakpoints so that we’re splitting the proceeds evenly with authors after our investments have been recovered.

2. Marketing: getting the message out to your readers is pretty much the same thing, whether you’re selling a print book or an ebook. Same types of people, same reasons to want the book, same selling points in the book. (Currently a smaller total pool of potential buyers, but that will change, I suspect.)

3. Plant costs (that’s publishing jargon for the fixed costs of preparing the manuscript for publication): the only one you don’t have, for the Kindle and some other types, and for now!, is compostion/text design. All of the editing still needs to be done (structural/ developmental, line, and copy-editing are all important to the quality of the final book). Cover images are still necessary. Etc, etc.

If the ebook is just an extra dab of icing on top of the cake of a book you’d do anyway, then the plant costs are almost irrelevant, but that’s obviously not going to be the case for very long.

4. Distribution: yes, you don’t need to ship the physical object, but you DO still need to pay those who own the channels through which you reach your reader. That may be Amazon or Fictionwise, or whoever, but it’s still a very large chunk of the revenue, if not most of it.

5. Cannibalization of Print Sales: whether through piracy, or because you believe that your readers would buy print if and only if they didn’t buy an ebook, it is possible that ebook sales will cut into your pbook sales. It doesn’t seem as if this happens yet for most types of titles, but it’s something that every publisher should consider.

In the end, only you can tell if the projected sales revenue will exceed the costs for a given title. And the only way to do that is to run your numbers, just as you did for a print book.

Some things never change.

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Posted in For Authors, Publishing Answers | 1 Comment »

Can Authors Copy the Digital Music Model?

Friday, July 31st, 2009

Like most questions in this business, the right answer is “It depends.”

And, since ebooks and digital reading are still embryonic, at less than 1/2 of 1% of the total industry, I’m sure that the answer will change.

In the music world, an enormous amount of the digital music is freeware — legitimately given away by the rightsholders, with the hope that it will be passed on to others. Some people think that the book world should follow suit. I have some thoughts on the issue. (Surprised? I thought not!)

What models are there, so far?

1. Advertising. (This includes sponsorships, product placement and overt ads.) This hasn’t worked even for magazines and newspapers on the Web, and it’s a lot less likely to work for books. Books aren’t timely, there aren’t circulation figures that you can reliably pitch to sponsors, and so on and so forth. I’m not even going to class this as an “It depends” unless you’re selling the umpteenth installment in a successful series.

2. Selling ancillary products. Musicians do shows. Authors? Not so much. There are consultants who use books as expensive calling cards, and high-profile speakers who are able to follow this model, but there aren’t many of them. If you are among them, grand. Giving away copies of a book virally in order to add energy to another career is a great idea, but it’s not going to work for most of us.

3. Electronic ARCs or galleys. This really does work for most of us. The model is the same as the ARC on paper: give away some copies in order to build buzz for the rest. It could be that you’re giving away your current book, or it could be something from the deep backlist, but make sure that you help people understand the limits on the permitted sharing. That can be accomplished by DRM (as in the giveaways on the Kindle) or by actually asking recipients to limit their sharing, but it needs to be made overt in some way.

4. Giving up on compensation entirely. Many musicians and other artists create for the emotional rewards, knowing that they’re highly unlikely to ever make a living at it. This does work for many authors, but most of us want to make a living. And books tend to take longer to create than songs, or most other artforms.

So, what models did I miss?

If you liked this post, you may want to subscribe to the RSS feed at the bottom of the page. You’ll get all the rest delivered to you.

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Plagiarism, Piracy and You

Thursday, July 16th, 2009

Most people misunderstand the limits on their rights to use someone else’s work. I’m not talking about hardcore pirates here, but ordinary folks who wouldn’t dream of taking something belonging to someone else — and who do it unintentionally.

Copyright and plagiarism
Many people believe that if you give credit to the original author, you can use whatever you want from someone else’s book, photography or music. If you give credit, you’re not a plagiarist, but you may be violating copyright or a trademark.

You can’t use someone else’s world, characters or other major elements of their creative work without permission (which usually costs money), unless the work is no longer under copyright. Fortunately, it’s usually extremely easy to get permission, especially if the work isn’t going to be sold commercially. (It may take some time, though, so start early.)

Works published before 1923 are usually in the public domain, as are those created by people who died before 1939. (Life plus 70 years is the term in US law.)

Accidental Plagiarism
It’s actually quite easy to use someone else’s words, or the way they structured their work, without meaning to do so. For example, consider the author in the library doing research and taking notes. The cell phone rings, and our author hurries out to answer it, forgetting to jot down whether the note is a copy of someone else’s work, or their own summation of an important thought. A year later, going through those notes, the unattributed words make their way into the book, and a scandal is born.

When you’re doing research, it might be a good idea to save copies of the pages you’re quoting, and make sure that the bibliographic info is on them.

It’s on the Web
The Web may make it easy to use someone’s work without permission, but that doesn’t make it right. It is emphatically not true that everyone who puts their words on the web will be thrilled that you’re sending them to other users. Not even if you give credit for it.

Some people put their work out here, and make it freely available, because they want fame. Some do it because they want to help the world. Some are trying to show potential customers what they have to offer, and some are trying to hunt up potential clients, and get them to register in order to get the free stuff.

Whatever their motivation, the work is theirs, and the decision about whether or not you can use it belongs to them. As does the right to make the judgment about whether your use will bring them more business, or not.

Fair Use
This is a defense, should you be sued, not a term clearly defined in the law. Basically, you can use small parts of another person’s work, if it fits the fair use criteria.

There are four:
1. Why are you using it? If you will be using it in a classroom, it may be fair use (although copying worksheets, or language tapes, or what all, usually is NOT). If you’re selling it for profit, that’s usually not fair use.

If you’re altering the work substantially, that also tends to lend legitimacy to your use.

2. The type of work you’re using
If it’s just for fun, you have less latitude than if it’s designed to save lives.

3. The amount and centrality of the portion you use.
If it’s a song or a poem, a tiny snippet can be a violation — unless you’re using only the title, and you use it as a title.

If you take the most important bits, it’s not fair use. And, yes, that’s a very fuzzy line, isn’t it? It’s a whole lot cheaper to get permission than to pay a lawyer if the owner of the work thinks you’ve crossed it.

4. Impact on profitability
If your use will reduce the rightsholder’s ability to profit from the work, you’re probably in trouble. And you’re not the one who gets to make that call. The rightsholder gets to decide if they want to sue you, and the judge and/or jury get to make the final call. Oh, and if it’s a registered copyright, there are statutory minimum penalties that make suing worthwhile, even if the damage is hard to establish, or small.

What examples have all of you found of these phenomena?

Is there anything here I got wrong? I’m neither a lawyer nor a writer, so I’m not invested in my own words. Go ahead and suggest something.

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Posted in For Authors, Publishing Answers | 6 Comments »

BEA

Wednesday, May 20th, 2009

How many of you will be at BEA next week? And how many will be going to IBPA-U, the big seminar series before it? (Remember, PMA changed its name last year to IBPA.)

For those who are interested in the things I say:

–I’ll be teaching a class at IBPA-U called Building A Better Budget (Wed. morning) and an Ask The Expert table at 7 am. (Much coffee will be consumed. Also tea.)

–I’ll be doing a brief seminar on profitability in tough times on the floor of BEA Saturday afternoon, in the Independents’ Lounge run by Foreword Magazine and the NY Center for Independent Publishing.

–I’m open to having my brains picked almost any time you catch me — buy me a cup of coffee and my mind is yours for a good long time!

I hope to see some of you there. If you see my name on a tag — introduce yourself!

I’ve been doing more speaking lately (Denver and Sacramento in April, NYCIP in March, and these). I must admit, I’ve always enjoyed teaching and speaking. (Shameless promo: if your group is looking for a speaker on my type of topic, I’m very inexpensive!)

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Starting Up

Tuesday, April 21st, 2009

The old “I’m just publishing my book, not starting a business” fallacy has reared its head again. So, if you already know all there is to know about founding your press, go away. You’re going to be seriously bored by this post. Or, better, stay, and tell me what I omitted in the comments!

First, any time you’re getting money for anything, it’s a business. And no matter whether profit is your primary goal or not, if you don’t at least break even, you won’t be accomplishing any goals for long. Money does matter.

Now that we have that settled: you need to decide what type of company you should have. If you don’t choose at all, you have chosen a sole proprietorship. This is the default, but it’s not necessarily a good choice for you. Your other choices are partnerships (general or limited), LLCs and corporations (S-corps or general). My personal preference for most publishing companies is an S-Corp. Why? Because it has the most upside potential, and I’m an incurable optimist. If you become successful, converting an S-corp to a general corporation, and even eventually selling stock to the public is less of a seismic shift.

Corporations offer about as much protection of your personal assets as you’re going to get, assuming that you actually do the annual paperwork, and treat the company as a “real business.”

Digression: If liability is a concern, you should also get media and general umbrella liability policies, at a minimum. I am aware of exactly two agents in the U.S. who know media liability policies inside and out. Toddle on over to the Reference Desk’s web directory to find them.

With an S-Corp, you do have to file corporate tax forms, but the profits get passed straight through to stockholders’ personal income, so you’re not double taxed. In fact, if you pay yourself a reasonable salary, there’s a very nice little effect. The profits aren’t generally subject to employment taxes such as Social Security and Medicare. Just play it straight, and this can work out well.

You should probably do more research on this subject. Depending upon the size of your effort, you might want to consult a tax attorney, buy one of the many good books on the subject, or just do an Internet search.

Whatever form you choose, you will need an Employer Identification Number (EIN), whether or not you contemplate hiring employees. After all, you really don’t want to hand your Social Security number to anyone who asks, but you will have to supply some tax identification number, on request, to anyone who pays your company more than a few hundred dollars per year.

Next, look up the licensing requirements for your city, county and state. Remember to get a sales tax collection or vendor’s license and identification number. If you’re not setting up a formal business entity, such as a corporation of some kind or an LLC, then you will probably need to file DBA notices (Doing Business As) in some public record. Google is your friend when you are searching for the latest local regulations on such things.

Digression: Remember to file Use Tax on anything you buy without paying some state’s sales tax, if it’s not to be resold. Individuals are supposed to pay this, but rarely get caught if they fail. Companies are routinely caught, and the fines and penalties are quite painful.

Set up an accounting system, and one for handling your orders and your contact database. There will be other needs for information handling systems, policies and procedures, and you’ll need to adjust the ones you begin with as things grow, but you must have something in place before you launch, or you’ll be overwhelmed.

And, no, a check book and and a shoe box are not enough!

The rest of the drill involves actually publishing the books and selling them. Those are fodder for other posts and for other people. I do hope, however, that this gives you a basic rundown on the launch of your business.

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Google and the Big Publishers

Monday, April 20th, 2009

Why did the larger publishers settle with Google? It’s pretty simple, I think.

Google has a lot more money to fight on this issue than even large publishers can spare.

More, the precedent set when Google was sued for scanning and indexing web sites might seem to apply to books and book scanning. After all, judges aren’t usually from an intellectual property background. Even IP lawyers often don’t really understand all of the ramifications of an event in our complicated industry, and this infringement takes us deep into complex territory.

So, the publishers looked at those two pieces of information, and decided to settle for something rather than take the chance of spending unbelievable amounts for legal fees and in the end, losing an enormous amount.

Is this settlement better for them than for us? Of course it is. Is it better for all the parties who crafted it than it is for us? Naturally.

Is it the best deal we’re likely to get? Yes. Even if you pull your books out of the settlement, all you end up with is the right to sue. Google can, and probably will, still infringe your rights. If you sue, you will face the same Hobson’s choice that the larger publishers did.

Is this just? No. Is it right? No. Has Google failed in its pledge not to be “evil.” According to their lights, no. They see the action of rights holders as evil in preventing Google from accomplishing something that they feel is a great social good, when we’re (again, in Google’s view) acting only for our own gain.

This is one of those quasi-religious arguments where every side is convinced that it’s right. And it’s one where you may have to settle for what you can get, in order to avoid a Pyrrhic victory or an annihilating defeat.

Or so I see it.

Oh, and if you’re not a US author or US publisher, should you care? Oh, yes. Your books will be scanned just like ours, if they’re in a library here. And they probably are in one library or another.

Posted in For Authors, Publishing Answers | 10 Comments »

Estimating Sales, Part III: Converting Amazon Sales Ranks into Sales Estimates

Friday, February 27th, 2009

If you want to estimate the sales of your own book, one of the best ways is to estimate the sales of the closest competition. There are other sources of sales data, such as Ingram’s iPage, and Bookscan, but I’m going to discuss the more complex process of turning Amazon sales ranks into estimates of sales through Amazon here.

Their sales rank formula shifts and is proprietary, of course, but one thing we do know is that it’s always roughly inversely proportional to sales, over any reasonable range. Most of you just came to a screaming halt, didn’t you? Well, it’s not as arcane as that sounded. You can do this, really. Yes, really.

Once more, in English, and taking one step at a time:

If you look at books that are selling roughly similar amounts, then you can say that Amazon’s sales ranks can be inverted (divide 1 by the rank), and the result will more or less proportional to sales.

Proportional to the sales means you can find a number to multiply the inverted ranks by, and you’ll get an estimate of sales through Amazon.

To find the number, I recommend that you look at Morris Rosenthal’s Foner Books site. He has a page, here, that gives a graph of sales per week and sales rank. I’ve never found a better correlation that’s publicly available.

Pick a sales rank number that’s in the middle of the range you expect your book to inhabit. Go down that line in the graph until you hit the red line, and then run across to the sales per week axis. Jot that number down beside the rank. (Oh, and yes, the graph looks a little different than you may be used to, but don’t worry, it’s more accurate because the axes are logarithmic.)

Now, multiply the sales per week (or year, if you prefer) by the rank. That’s the factor of proportionality. If you divide your resulting number by sales ranks that are close to the one you chose, you’ll end up with an estimate of the sales for that title.

Caveats: First, sales ranks change quickly. Use the middle of the range that each title inhabits.

Second, you’re only estimating sales through Amazon. Only you know whether that’s likely to be 12% or 75% of the sales for this title.

Third, this is most useful for estimating the sales of titles that are competing with yours, or for estimating those numbers in order to get a rough ballpark estimate of the potential sales of your future title.

And last, but never least, if any of the calculations I describe seem to you to be giving you a wrong answer, if the answer is just plain “off,” rely upon your experience and judgment, not on the spreadsheets.

So, who has a question about this? A suggestion for improving it? Or something else they’d like to raise?

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I’ve Written A Book, Should I Self-Publish?

Thursday, February 26th, 2009

I have some very hard-to-hear advice: not all manuscripts are meant for publication. There’s no way for me to know if yours is or is not, but you can do some things to determine whether it is or not. There are other things you can do to try to get traditionally published. I’ve blogged before about those issues.

Lately, you’ll hear a lot about self-publishing. It may be something you should consider, but it may not. What questions should you ask?

1. Why am I publishing this book, and what does that imply about the best path?

2. If a mainstream publisher is your first choice, why are you reading this post? Go read some of my others, and at least a couple of the agent blogs.

3. Your market:
–Who is my book designed for?
–Why will they want it?
–What else do I know about them?
–Where can I find them in large groups, and how can I market to them through those clusters?
When you can answer those questions, you can estimate the likely sales of your book. And yes, this is your problem, ultimately, no matter how you publish. If your books don’t sell, you’re going to have a very hard time accomplishing any goals with them.

4. Should you use a self-publishing service? If your likely sales are more than 50 to 100 copies, then you should probably avoid so-called self-publishing companies. Why? I discussed it here. (These services are also called on-line publishers or POD publishers, by the way.) Using one of them will limit your potential sales in most cases. (I have several other posts on estimating sales, and add more regularly. Walk yourself through them, if you’re not experienced in this industry.)

5. Can I run a business?
5a. Can I sell my book to others?
Being an author is being in business, but the penalties for ignroing most of the implications of this are relatively small. When you self-publish, that’s no longer true. And you’re going to have to be responsible not only for the back office nitty gritty, but also for the marketing. Many authors have a hard time accepting that necessity or performing in those roles. If you’re one, don’t even try self-publishing. It’s not going to make you happy.

6. Do I have the time and energy to learn a lot of new things? Publishing is complicated, and it’s very easy to make expensive mistakes. After your first book, things do get less confusing, but it’s not going to stop being a learning experience. After 18 years in this business, I’m still learning something every day.

7. Do I have enough money to do my book justice? Trade publishers spend about $20,000 or more to launch a single title. You don’t need anything like that much, but you do need some money. You’re going to need to buy ISBNs, and register your copyright. You’re going to need some software, and a lot of books on the various disciplines of design and marketing and production. You may need to pay for a print run, etc.

NB: You do not need a so-called POD publisher in order to print POD. You can directly approach any printer, once you have established your own publishing identity. Buying the ISBN and learning something about the business are more or less prerequisites.

8. Do you really understand what you’re getting into? Publishing is addictive, and most people who try it do get hooked. Before you start, do you have permission from
–your spouse or significant other?
–your immediate family?
–your accountant?
–your mental health professional?
I’m joking, of course, but it’s also true. This will drain your bank account, absorb your time and attention, and generally take over your life. You’ve been warned!

Posted in For Authors, Publishing Answers | 2 Comments »

Managing Email

Thursday, December 11th, 2008

Most of you probably know this already, but I hear more than a few complaints about being overwhelmed by email.

I get around 10,000 non-spam emails per month. I think the tactics I use will pay off for anyone handling more than 25 or 30 “real” emails per day. If you’re getting much more than 30,000 per month, you may need more sophisticated techniques.

Start with: spam filters.
I use a Bayesian one, and recommend this class of filters highly. They learn as you go from the emails that you mark as spam, and from the ones that you fish out of your email box as non-spam. After a few weeks of using one, you should be catching the vast majority of your spam, and have a false positive rate in around one or two tenths of one percent.

Follow with: threading.
Having your conversations collected by thread is critical. Not everyone “snips” well. (Snipping is cutting out the parts of the prior email that aren’t necessary for context, so that the whole thing isn’t miles long, and you can find the new entry whether it’s top posted or bottom. Doing it well means keeping enough but not too much to supply context.)

Next: subject filters and specialized boxes.
Most of my non-spam email comes from the listservs to which I belong. I filter all of that into special in-boxes, with one for each active list, and one for all of the inactive ones. These are all in a separate folder that I can look at when I have time.

Everything that doesn’t fit a bulk category goes into the general email box, and this tends to be either junk or urgent stuff. It also tends to be pretty small amounts.

Saving emails:
I have dozens of subject boxes, in nested folders (each layer gets more specific), and my email client program automatically indexes them for searching by subject, addressee and sender, or by keywords within the email. I take emails from my current in boxes and file them in these subject boxes when I have made whatever responses or actions are required.

To Do boxes:
If there are long-term projects or issues, I tend to create a to-do box for them, and file emails inside it, even if the action hasn’t been completed. Some of these take such a long time that my other active boxes get overwhelmed. It’s hard to keep track of more than 20 active emails in a box — or at most, 50.

Posted in For Authors, General Comments, Me, my life, and this blog, Publishing Answers | No Comments »

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